Great Clips
Bottom line
- Total investment $188K – $420K including a $20K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $399K/year (median $382K). Estimated payback in 3.7 years.
- Rated STRONG with a risk score of 47/100. SBA loan default rate of 0.0% across 647 loans (below the industry average).
- System growing at 30% CAGR over 3 years with 4439 total units — strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Great Clips unit return on the cash you put in?
Unlevered ROIC · per unit
22%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Great Clips units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$958K
on $4.8M purchase
Total debt
$3.8M
SBA $2.4M + senior + seller note
Overview
About
Great Clips franchisees operate budget-focused hair salons providing quick haircuts, typically in high-traffic retail locations. Day-to-day operations involve scheduling appointments, managing 3-8 stylists, inventory control (shampoo, towels, tools), customer service, and maintaining brand standards for walk-in traffic predominantly from price-conscious customers seeking 20-30 minute haircuts.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 10 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Great Clips presents moderate-to-cautionary risk: a mature, stagnant franchise system with unverified financials, thin margins, and limited growth prospects despite stable brand recognition.
Score breakdown · what drove the 47 / 100 rating
- 01MINORSystem stagnation: 4,439 units with only 0.3% YoY growth indicates mature/declining market with minimal expansion opportunity
- 02MINORNo Item 19 financial disclosure: Average revenue of $399,179 and net income of $82,637 are unverified estimates, making ROI projections unreliable
- 03MINORThin profit margins: 20.7% net margin leaves little room for error; 6% royalty ($23,951 avg annual) plus operating costs create vulnerability to economic downturns
- 04MINORHigh entry cost relative to returns: $187,800-$419,900 investment against $82,637 avg net income yields 2-4 year payback with execution risk
- 05MINORCommoditized service model: Low-cost haircut category faces Amazon-style disruption (mail-in clipper kits, DIY trends, budget competitors)
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
63 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Great Clips · FDD (2025) PDF